The US Trade Department announced yesterday that it will analyse the impact of a proposed French law on digital taxation whether the law will unfairly harm US companies. The law focuses on tech giants and will be voted on today in the French Senate, and passed the national Assembly last week. The move by the US could ultimately see tariffs brought against French companies.
MEP Molly Scott Cato, Member of the Committee on Financial and Monetary Affairs, comments:
“We support France’ attempts to make tech companies pay their taxes where they operate and generate revenue. This decision by the US is putting at risk the OECD negotiations for modernising tax rules for the digital economy, and to make digital companies pay their fair share in taxes.
“The current situation is a result of failure at the EU-level to agree on a digital services tax and it shows that the unanimity rule is undermining the European position on the global level. It’s a weakness of EU decision-making that only four Member States managed to block EU action on a tech tax.”
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group adds:
“Europe cannot degrade it’s position through inaction. The last US corporate tax reform cost European states a lot of money and the US never asked the EU our opinion on their reforms. Now, Europe must stand-firm and call for EU action on a tech tax. We call on the Commission and all EU Member States to show solidarity with France. There are currently other EU states planning digital services taxes such as Spain, Czech Republic, Poland and the UK that could face similar threats from the US.
“The Commission must use its right to put forward legislation under ordinary legislative procedure to overcome the veto of a handful of Member States in the Council.”
Four EU Member States (IRL, SE, DK, FI,) blocked EU proposals for a digital service tax in March this year.
OECD negotiations around new rules to tax the digital economy are on-going and should be finalised by the end of 2020.
The Greens/EFA group are calling on the Commission to put forward legislation under Article 119 that would use the ordinary legislative procedure with the Parliament on an equal footing with the Council.